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Tenancy Rent Control and Credible Commitment in Maintenance

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Author Info
Richard Arnott () (Boston College)
Elizaveta Shevyakhova

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Abstract

Under tenancy rent control, rents are regulated within a tenancy but not between tenancies. This paper investigates the effects of tenancy rent control on housing quality, maintenance, and rehabilitation. Since the discounted revenue received over a fixed-duration tenancy depends only on the starting rent, intuitively the landlord has an incentive to spruce up the unit between tenancies in order to 'show' it well, but little incentive to maintain the unit well during the tenancy. The paper formalizes this intuition, and presents numerical examples illustrating the efficiency loss from this effect.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 661.

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Length: 34 pages
Date of creation: 18 Apr 2007
Date of revision:
Handle: RePEc:boc:bocoec:661

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Related research
Keywords: tenancy rent control; rent control; maintenance; housing quality; rehabilitation; credible commitment;

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Find related papers by JEL classification:
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
R38 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Government Policies; Regulatory Policies

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Blair Jenkins, 2009. "Yet Another Refutation of the More Guns, Less Crime Hypothesis - With Some Help From Moody and Marvell," Econ Journal Watch, Atlas Economic Research Foundation, vol. 6(1), pages 73-112, January. [Downloadable!]
  2. Richard Arnott & Elizaveta Shevyakhova, 2008. "Tenancy Rent Control And Credible Commitment In Maintenance," Working Papers 200812, University of California at Riverside, Department of Economics, revised Sep 2008. [Downloadable!]
    Other versions:
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